Epazz Sets Date For Spin Of Concept It Doesn't Feel Is Worth Discussing

Call us old fashioned, but we believe a public company should be a working business- not merely an idea. Shaun Passley, CEO of Epazz(EPAZ) clearly disagrees. As we discussed last week, he plans to spin out companies like cake batter from an out of control mixer. Since then, the company has announced its first spinoff, Project Flex, and revealed that the record date for the spinoff will be September 15,2013. Shareholders would receive one share of Project Flex for every ten they own of Epazz. So, what does Project Flex do? Strangely, neither press release mentions anything about the company at all.

This is all about stock hype. While there is nothing written about the company, both press releases prominently make the claim that “The spin-off of Project Flex will be above $0.01 per share.” This is a dangerous and confusing claim to make. The price of the spinoff will be set based on what the market is willing to value it at, and given that this is a business that wouldn’t be able to catch a bid on Shark Tank, we don’t see why anyone would be buying. Previous releases tell us that Project Flex is a patent pending cooling technology that is being beta-tested. This is an idea, not a business, and certainly not one that belongs in the public market. But that is clearly not the point for Epazz, which is trying to attract investors who think two small empty cups are better than one big empty one. A fool and his money are soon parted, and the fool will find himself with a stack of worthless paper.

Disclosure: The author holds no shares of any stock mentioned, and neither should anyone else.

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